$5m farm fraud inquiry

Police have referred to the Serious Fraud Office a complaint laid by a director of Canterbury-based livestock company Cuttle and Isaacs, which has gone into liquidation owing farmers millions of dollars.

Company director Michael Buchanan lodged a complaint with the police and Detective Kate Wilson, of Ashburton police, said it had been referred to the Serious Fraud Office.

Federated Farmers national president Alastair Polson said farmers could be owed between $5 million and $10 million.

Independent chartered accountant Warwick Ainger, of Christchurch, was appointed the firm's liquidator on Wednesday.

Mr Ainger said he was investigating the affairs of the company and forwarding notification to all known creditors and debtors. He expected to release an initial report within two weeks.

Mr Ainger said it was too soon to give a picture of the company's position.

Cuttle and Isaacs bought stock from around Mid-Canterbury and the lower North Island for killing at Alliance Group works in the South Island.

The debts were for livestock purchased by Cuttle and Isaacs on or before January 3.

After that date, stock purchased by the company was paid for directly by Alliance group.

It was fortunate the problems had occurred at a time when things were going well for farmers, but losses could still prove devastating for any farmer who had put all his eggs into one basket, Mr Polson said.

One Mid-Canterbury farmer owed close to $200,000 through the collapse said he was "trying to get a grip on the case".

The sheep and crop farmer said he was "absolutely devastated".

"I can't say I'm not under threat but my operation is not blown to bits," the farmer said.

"There will be replacement debt and it'll put me 10 bloody years behind."

The farmer said he believed there was a real need for farmers to band together and it was likely a farmer meeting would be held soon.

Rod McKenzie, Masterton deputy mayor and Kopuaranga farmer, said he had not been paid for the 220 lambs he sold for about $80 a head to Cuttle and Isaacs before Christmas.

Mr Polson also urged farmers to came forward.

"Farmers have lost enough money now.

"I advise them not to spend any more on picking over the bones of the company."

Mr Polson said Federated Farmers was able to put together a collective legal representation at minimal cost.

- NZPA